Answer to Question #16321 in Statistics and Probability for Vinay

Question

A businessman has two independant investments A and B available to him, but lacks the capital to undertake both of them simultaneously. He can choose to take A first and then stop, or if A is sucessful then take B or vice versa. The probability of success on A is 0.7 while for B it is 0.4. Both investments require initial capital outlay of $2 000 and both return nothing if the venture is unscuessful. Sucessful completion of A will return $ 3 000 (over cost), while sucessful completion of B will return $5 000 (over cost). How would I prepare a rport with the aid of a decision tree adivising the best course of action?